Treasury Department in dark about Greater Kinston Credit Union’s use of TARP money

Friday

May 2, 2014 at 12:01 AMMay 2, 2014 at 7:29 PM

Seven other institutions also never gave annual report

Wes Wolfe / Staff writer

The U.S. Department of Treasury issued millions of dollars to banks and credit unions under the plan the money would be used to bolster small business lending during the recession in underserved communities.

It was part of the Troubled Asset Relief Program bailout called the Community Development Capital Initiative. But, a report issued Wednesday to Congress reveals there’s been a lack of oversight from Treasury, leading some institutions to not report what they did with the money for years.

“Never once has Treasury received 100 percent compliance,” according to the Quarterly Report to Congress issued by the Office of the Special Inspector General for TARP (SIGTARP). “In other words, never in the history of the program have all the banks and credit unions in CDCI complied with the mandatory requirement to report on how they used the TARP funds.

“Eight banks and credit unions in CDCI have never told Treasury how they used TARP funds, despite being required to do so in the contract they signed to get the TARP money.”

The Greater Kinston Credit Union is one of those eight institutions mentioned. It received $350,000 through CDCI.

The GKCU didn’t respond to a message left for comment by press time.

The report noted that as time went on from 2010, a growing number of institutions failed to meet reporting requirements made as part of the agreements to receive CDCI funds.

“Simply put, the American people have a right to know how tax dollars are being spent. Without reporting on the use of TARP funds, Treasury, SIGTARP, and taxpayers are left in the dark, deprived of the transparency required by the terms of CDCI participation.

“Requiring institutions to report on their use of TARP funds is fundamental to making TARP transparent to the public.”

In her letter to Congress, Special Inspector General Christy L. Romero wrote proper oversight so far led to 188 people receiving criminal charges for mishandling TARP funds and 129 convictions, as of April 2, and enhanced corporate accountability.

“SIGTARP’s work is far from over as the long-term second stage of recovery from the crisis will take time and continued hard work,” Romero wrote. “We continue to uncover new TARP-related criminal schemes.

“Persistent oversight and law enforcement by SIGTARP is necessary to restore confidence and advance economic stability through justice and accountability. Long term full recovery from the financial crisis depends on it.”